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Third Rite Aid Defendant Pleads Guilty

Jun 26, 2003 | AP

A third defendant in the Rite Aid Corp. accounting scandal pleaded guilty Thursday, while the status of the last former executive charged in the case remained in limbo.

Eric Sorkin, who was fired by the Rite Aid board Wednesday as the company's vice president for pharmacy purchasing, pleaded guilty to one count of conspiring to obstruct justice.

Under a plea agreement with prosecutors, Sorkin faces a maximum penalty of five years in prison, a $250,000 fine and three years' supervised release. Prosecutors said they would recommend a lesser sentence if he demonstrates that he accepts responsibility for his actions.

A change-of-plea hearing for Franklin C. Brown, Rite Aid's former chief counsel and board vice president, originally scheduled to follow Sorkin's hearing, was postponed at the request of Brown's lawyers, according to Assistant U.S. Attorney Kim Douglas Daniel.

Jurors for Brown's trial, which had been scheduled to start next week, also were dismissed under an order issued by Judge Sylvia H. Rambo, Daniel said. The prosecutor declined to say why the hearing was postponed and the jurors dismissed, but said any trial of Brown would require the selection of a new jury.

Rambo said in an order that Brown has until July 14 to decide whether he wants to go to trial or change his innocent plea.

Sorkin apologized to the court for his actions.

"I'm truly sorry for what I did. I wish to apologize to the court, to my friends and family, and to Rite Aid associates," he said, his voice breaking with emotion. "I take full responsibility for what I did."

Rambo accepted Sorkin's plea but deferred sentencing pending a pre-sentence investigation.

Brown, 75, is accused of conspiring with other Rite Aid officials to inflate the company's stock price in the late 1990s and of interfering with federal investigators.

Brown, who had been among three former top executives facing the most serious charges, had been left to stand trial alone after former chief executive Martin L. Grass and former chief financial officer Franklyn Bergonzi pleaded guilty to conspiracy charges and agreed to cooperate with prosecutors in recent weeks.

Sorkin was to have been tried separately on charges of conspiracy and lying to a grand jury.

Sorkin, who had been on administrative leave as the company's vice president for pharmacy purchasing for the past year, was fired by the Rite Aid board following the annual stockholders' meeting in New York City on Wednesday, company spokeswoman Karen Rugen said Thursday.

The count to which Sorkin agreed to plead guilty alleges that he conspired with Brown and Grass — after Grass had stepped down as CEO — to provide false and misleading information to government and company investigators, to destroy physical evidence, to intimidate other witnesses into making false statements and to create back-dated documents.

Last week, Grass admitted falsifying the books at the drugstore chain, becoming the first major CEO to plead guilty in an accounting-fraud case since the Enron scandal stirred public outrage over white-collar crime.

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